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Value-Added Tax Act, 1991 (Act No. 89 of 1991)

Part II - Value-Added Tax

19. Goods or services acquired before incorporation

 

Any company, being a vendor, shall, where any amount of tax has been charged in terms of section 7 in relation to the acquisition of goods or services for or on behalf of that company or in connection with the incorporation of that company, and those goods or services were acquired prior to incorporation by a person who—

(a) was reimbursed by the company for the whole amount of the consideration paid for the goods or services; and
(b) acquired those goods or services for the purpose of an enterprise to be carried on by the company and has not used those goods or services for any purpose other than carrying on such enterprise,

be deemed to be the recipient of the goods or services and to have paid the tax so charged as if the supply or the payment of the tax had been made during the tax period in which the reimbursement referred to in paragraph (a) is made: Provided that this section shall not apply in relation to any goods or services where—

(i) the supply of those goods or services by that person to the company is a taxable supply, or is a supply of second-hand goods not being a taxable supply;
(ii) those goods or services were so acquired more than six months prior to the date of incorporation of the company; or
(iii) the company does not hold sufficient records to establish the particulars relating to the deduction to be made.